Asked by Elorah Stoner on Jul 01, 2024
Rhoda takes a job with a construction company.She earns $5 an hour for the first 40 hours of each week and then gets "double-time" for overtime.That is, she is paid $10 an hour for every hour beyond 40 hours a week that she works.Rhoda has 70 hours a week available to divide between construction work and leisure.She has no other source of income, and her utility function is U cr, where c is her income to spend on goods and r is the number of hours of leisure that she has per week.She is allowed to work as many hours as she wants to.How many hours will she work?
A) 50
B) 30
C) 45
D) 35
E) None of the above.
Double-Time
A term typically used in payroll to describe a rate of pay that is twice the employee's normal wage rate, often applied to overtime work.
Utility Function
A mathematical representation in economics of a consumer's preference ranking over a set of goods or outcomes, used to analyze choices and behavior.
- Examine the consequences of wage variations on the preference between employment and leisure activities, along with the backward-bending labor supply curve.
- Gain insight into the utility maximization principle and its influence on choices related to consumption and employment.
Learning Objectives
- Examine the consequences of wage variations on the preference between employment and leisure activities, along with the backward-bending labor supply curve.
- Gain insight into the utility maximization principle and its influence on choices related to consumption and employment.